7/02/2008 @ 6:00PM

International Investing Guide

Rising commodity prices, frail banks, inflation and a slowing U.S. economy are all taking a toll on global markets. The point of putting money abroad is not to duck economic risk but to diversify it. There are times when a strong dollar or a comparatively strong U.S. economy leave the dollar investor worse off for having ventured abroad; other times a weak dollar or lagging U.S. profits send foreign portfolios ahead of U.S. ones. Since mid-2003 stocks in Brazil, China, India, Mexico and Russia have done particularly well. The S&P 500 has returned only 6.6% a year.

Nations from Brazil and Mexico to the Czech Republic and even several countries in Africa are benefiting from economic reforms, rising prices for their natural resources, growing export markets and the rapid rise of consumer markets within their own borders.